(Bloomberg) -- Verizon Communications Inc. shares dropped on Monday after the company reported continued customer losses and lagging revenue.

Free cash flow also fell short of analysts’ expectations, even as the largest US retail wireless provider said more people were choosing premium phone plans.

New York-based Verizon reported first-quarter earnings per share, excluding some costs, of $1.15, according to a statement Monday. That compares with analysts’ average expectation of $1.12. Operating revenue of $33 billion missed Wall Street’s prediction of $33.2 billion and was only up 0.2% from a year earlier.

Verizon initially rose on the results, which showed it losing fewer consumer wireless retail customers than expected, before dropping as much as 4.4%, the most in six months. The shares traded at $38.86, down 4%, at 12:00 p.m. in New York.

In recent years, Verizon has lost ground in subscriber growth to wireless rivals. To regain momentum, it has simplified pricing for unlimited-data plans and offered add-on perks such as bundled Netflix and Max streaming plans. 

In the first three months of the year, Verizon reported losing 158,000 consumer wireless retail customers, compared with a predicted loss of 212,900. The drop was less than in the same quarter last year, and Verizon said its consumer segment turned in its best first-quarter performance since 2018.

Total wireless service revenue was up 3.3% to $19.5 billion, helped by price increases and by more people choosing premium plans, Verizon said. 

First-quarter free cash flow of $2.7 billion compared with analysts’ expectation of  $3.7 billion. Verizon expects free cash flow to build throughout the year, Chief Executive Officer Hans Vestberg said on a call with analysts. 

Verizon’s internet business boomed in the quarter. The company reported total broadband net additions of 437,000, the largest in more than a decade, with gains in fixed wireless and its Fios wired product, Verizon said.

Fixed wireless offers internet service to a device in a home or dwelling over airwaves, rather than using a line into a home. Verizon says users can enjoy speeds comparable to a wired broadband connection, but access is limited to areas near cell towers.

Verizon’s fixed wireless offering saw an increase of 203,000 consumers and 151,000 businesses signing on in the quarter. The additions brought the number of customers using the service to 3.4 million of the company’s 11.1 million broadband internet subscribers.

Fixed wireless technology has accounted for more than 90% of recent broadband gains across the industry, buoying mobile carriers while cable rivals are likely to report customer losses for the first quarter, according to Bloomberg Intelligence.

Verizon shares gained 7.4% this year before Monday, outpacing rivals AT&T Inc., which was down 1.6% in the same period, and T-Mobile US Inc., which had gained 1.3%.

(An earlier version of this story corrected figure for expected retail postpaid consumer loss in sixth paragraph.)

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